In this article, we discuss the 5 best electric utility stocks to invest in. If you want to read about some more electric utility stocks, go directly to 10 Best Electric Utility Stocks To Invest In.
5. DTE Energy Company (NYSE:DTE)
Number of Hedge Fund Holders: 28
As the economy heads towards a recession, Wells Fargo recently announced its stock picks for a recession portfolio, and DTE Energy Company (NYSE:DTE) ranked among the utility stocks on the list. The Michigan-based firm generates and provides electricity, as well as gas to clients in Southeastern Michigan. The company also deals in the provision of wastewater treatment services, chilled water production, metallurgical coke, and compressed air to industrial customers. As of June 27, it pays a 2.85% yield to shareholders, and has posted gains of 11.56% in the last 12 months.
In the first quarter of 2022, DTE Energy Company (NYSE:DTE) reported earnings per share of $2.31, outperforming estimates by $0.23. Revenue of $4.58 billion for the quarter showed year-on-year growth of 21.15% and also beat analysts’ predictions by $1.04 billion.
4. Ameren Corporation (NYSE:AEE)
Number of Hedge Fund Holders: 28
Ameren Corporation (NYSE:AEE) deals in the production and transmission of electricity to consumers in Missouri and Illinois, as well as the distribution and transmission of natural gas. The company generates its power through a mix of conventional and renewable sources, and on June 27 announced that it was acquiring its largest ever solar power facility, a 200 MW setup in central Missouri. Ameren Corporation (NYSE:AEE) was another utility firm that featured in Wells Fargo’s list of recession stocks to buy.
On June 3, Argus analyst Marie Ferguson raised the firm’s price target on Ameren Corporation (NYSE:AEE) to $102 from $95 and maintained a ‘Buy’ rating on the shares. The analyst notes that Ameren is the beneficiary of a more favorable regulatory environment and steady rate base growth, and that company management projects 7% CAGR (compound annual growth rate) in its rate base through 2026. Ferguson is bullish on the company’s future growth prospects, and reaffirmed her $4.35 EPS estimate for 2023.
For Q1 2022, Ameren Corporation (NYSE:AEE) posted a $1.88 billion revenue, up 20% from the year-ago quarter and beating estimates by $266.9 million. EPS came in-line with estimates. As of June 27, the company offers a 2.65% yield to shareholders, and has increased its dividend payout for 8 years in a row. It has also registered gains of 8.61% in the last 12 months.
3. Public Service Enterprise Group Incorporated (NYSE:PEG)
Number of Hedge Fund Holders: 31
Public Service Enterprise Group Incorporated (NYSE:AEE) is one of the best electric utility stocks to buy now, according to Goldman Sachs and Wells Fargo, as both featured the company in their lists of stable stocks to buy in the current environment. It is a New Jersey-based utility company which provides electricity and gas to customers across the Northeastern and Mid-Atlantic United States.
On April 12, Wells Fargo analyst Neil Kalton reiterated an ‘Overweight’ rating on Public Service Enterprise Group Incorporated (NYSE:AEE) shares and bumped the price target to $87 from $82, noting that the backdrop for nuclear power continues to improve.
2. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 32
Duke Energy Corporation (NYSE:DUK) is next up on our list of the best electric utility stocks to buy. It deals in the transmission of electricity and gas to residential, commercial and industrial customers in North Carolina, South Carolina, Indiana, Florida, Ohio, and Kentucky. It generates its electricity through a combination of coal, natural gas, nuclear fuel, hydroelectric, as well as solar and wind setups.
KeyBanc analyst Sophie Karp in April reiterated an ‘Overweight’ rating on Duke Energy Corporation (NYSE:DUK) shares, and increased the price target to $119 from $110. As a core utility investment experiencing significant tailwinds in customer growth in its core markets, the analyst thinks that Duke is well-positioned in the market and warrants a premium to its large cap peers. Wells Fargo recently mentioned Duke Energy Corporation (NYSE:DUK) among the utility stocks to buy right now as the economy nears a recession.
For Q1 2022, Duke Energy Corporation (NYSE:DUK) posted a revenue of $7.13 billion, increasing 15.97% from the year-ago quarter and also outperforming analysts’ predictions by approximately $808 million. The company pays a solid 3.75% yield as of June 27, and has paid a dividend since 2006.
In the first quarter, Jim Simons’ Renaissance Technologies held 1.66 million shares of Duke Energy Corporation (NYSE:DUK) worth $185.6 million, making it the firm’s leading shareholder. Overall, 32 hedge funds were bullish on the utility firm at the close of the first quarter, with aggregate positions worth $1.04 billion.
1. American Electric Power Company, Inc. (NYSE:AEP)
Number of Hedge Fund Holders: 33
Finally there’s American Electric Power Company, Inc. (NYSE:AEP), a utility holding company based in Ohio which provides electricity to approximately 5.5 million customers across 11 states. It provides wholesale electricity to other utilities and municipalities as well. The company generates its electricity through a mix of renewable and non-renewable energy sources. American Electric Power Company, Inc. (NYSE:AEP) is undergoing one of the fastest transitions to green energy in the United States, with a number of renewable energy projects set to unveil in the near future.
American Electric Power Company, Inc. (NYSE:AEP) disclosed an EPS of $1.22 for the first quarter, beating consensus estimates by $0.02. The company’s revenue of $4.6 billion for the quarter also exceeded analysts’ predictions by nearly $200 million and represented year-on-year growth of 7.3%
In late April, Credit Suisse analyst Nicholas Campanella initiated coverage of American Electric Power Company, Inc. (NYSE:AEP) with an ‘Outperform’ rating and a price target of $113. Campanella believes investors should focus on the firm’s strategic pivot of divesting under-earning, low multiple assets. AEP has increased its dividend payments for 17 years in a row, and pays a 3.28% yield as of June 27.
33 out of the 912 hedge funds tracked by Insider Monkey at the close of the first quarter were long American Electric Power Company, Inc. (NYSE:AEP), with combined stakes worth $429.8 million. With a position consisting of 1.2 million shares valued at around $120 million, Millennium Management was the most prominent Q1 shareholder of American Electric Power Company, Inc. (NYSE:AEP).
ClearBridge Investments discussed American Electric Power Company, Inc. (NASDAQ:AEP) in its Q1 2022 investor letter, stating:
“About 5% of the portfolio is in transitioning power companies, typically migrating from coal to renewables. We have been active in encouraging these transitions and added a new position in American Electric Power (NASDAQ:AEP). AEP has the fastest planned renewable energy ramp in the U.S., with plans to both shrink coal and grow renewables by 50% each by 2030. This would drive an 80% emissions reduction, while supporting high single-digit earnings growth at a double-digit return.”
You can also take a look at 10 Best Cheap Stocks To Buy Now and 15 Best Long-Term Stocks To Buy Now
